In April, Equitas Holdings, a social enterprise that was granted Small Finance Bank (SFB) licence by RBI, saw its Rs. 2176-cr initial public offering (IPO) oversubscribed 17 times. Social entrepreneurs never had a better time in India. Societal problems are known; be it electricity, drinking water, food or transport. But validated data pertaining to these
In April, Equitas Holdings, a social enterprise that was granted Small Finance Bank (SFB) licence by RBI, saw its Rs. 2176-cr initial public offering (IPO) oversubscribed 17 times. Social entrepreneurs never had a better time in India.
Societal problems are known; be it electricity, drinking water, food or transport. But validated data pertaining to these are not easy to find making it difficult for opportunities to be defined. This is the major difference between a traditional startup ecosystem and social entrepreneurship (SE) startup ecosystem. In the airline or hospitality industry for example, data is easily available and hence, business opportunities can be clearly spotted. But to create a chain of water-vending machines for BPL (below poverty line) masses, we lack reliable inputs.
A poor customer’s buying psyche has not been understood nor is it taught in B-Schools. Social enterprises deal with a different set of customers – less literate, price sensitive because of limited disposable income, scattered and gravely exploited. So, pricing models need to be unique. However, academia has long been driven by the NGO agenda and not business models. SE-related educational courses are yet to be taught in universities.
Government policies on health, education and energy are muddled with subsidies and vote-bank politics. The poor in our country are used to demanding education, health and energy as a right but unwilling to pay for it. This makes SE challenging. Subsidies have to come down eventually (as in the case of LPG) as it is unsustainable. It will happen in education and healthcare too.
There are hardly any social enterprises that have reached the IPO stage. Hence, capital in the form of angel and series A/B funds is scarce. However, the number of millionaires is increasing so is the number of angels. Today, raising capital for a good idea is not a problem at all. Over the next five years the government is most likely to relax CSR norms as per Schedule 7 of Indian Companies Act and allow companies to use statutory CSR allocation for directly funding social enterprises.
Kerala is one of the first few states to announce a comprehensive startup policy which envisages supporting even student entrepreneurs. The Government’s thrust has also seen many technology business incubators (TBI) taking shape. Business houses and HNWIs of Kerala have also come forward and set up startup funds. However, social entrepreneurship lacks an integrated platform in India which we are trying to address through Villgro’s Unconvention|L summits.
Embrace Innovations’ low cost portable infant warmers co-founded by Rahul Alex Panicker, 1298 Ambulance Access for All (AAA) promoted by Shafi Mather and Ajit Narayanan’s Invention Labs that conceptualized Avaz and FreeSpeech for the disabled are high impact social enterprises created by Keralites outside their State.
Many youngsters ask me this question: how can I become a social entrepreneur, make money and change the world? At Villgro, we have a five-stage process: Inspire (Reading C K Prahlad’s ‘The Fortune at the Bottom of the Pyramid’ is a good idea or ‘Building Social Business’ by Muhammad Yunus), Immerse (Teach for India or The Young India Fellowship, maybe), Incubate (KSUM, SV, Villgro), Invest (Ankur Capital, Acumen Fund, Menterra) and of course, Impact.
(The author is Founder & CEO, Villgro and Co-founder, Menterra Venture Advisors)